CNBC’s Jim Cramer on Thursday said that inflation could soon decline, leaning on charts analysis from legendary technician Larry Williams.
“The charts, as interpreted by Larry Williams, claim that inflation could soon cool off substantially soon if history’s any guide,” he said.
The “Mad Money” host’s comments come following the Federal Reserve on Wednesday raised interest levels by another 75 basis points and reiterated its hawkish stance against inflation.
To describe Williams’ analysis, the “Mad Money” host first examined a chart of the existing Federal Reserve sticky price consumer price index (in black) set alongside the burst of inflation in the late seventies and early eighties (in red).
Williams notes that the existing trajectory of sticky price inflation has closely hugged this historical pattern, Cramer said.
He added that whenever located in the pattern of inflation in the late seventies and early eighties, current inflation is roughly in the 1980 point of the trajectory that is around when inflation peaked then.
“Today, unlike in the past, the Fed knows just how to beat inflation, and Jay Powell shows that he’s ready to bring the pain. Which means it will peak sooner,” Cramer said.
For more analysis, watch Cramer’s full explanation below.